FIRESTONE AUSTRALIA PTY LTD v IGIC SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL PRIESTLEY, CLARKE and MEAGHER JJA 30 August 1990, 11 October 1990 [1990] NSWCA 62 QUANTUM APPEAL — Damages awarded for injury to back suffered in consequence of unsafe system of work — no new question of principle necessary to be resolved — some errors in calculation conceded by respondent; some by appellant — corrections made. Priestley JA This appeal was well prepared on both sides. One result was that senior counsel for the appellant did not pursue a number of grounds in an optimistically drawn notice of appeal; and senior counsel for the respondent agreed that one of the remaining grounds of appeal could not be opposed. The matters left to be decided by the court were reduced to a few which can be explained and decided quite shortly. Before Enderby J, at first instance, the respondent Mr Igic, as plaintiff, claimed damages from the appellant Firestone Australia Pty Limited as defendant for an injury to his back suffered by him on 23 August 1977 while working for Firestone. The plaintiff alleged the injury was brought on by Firestone's unsafe system of work. At the trial before Enderby J in May 1988, Firestone admitted liability. Enderby J assessed the plaintiff's damages as follows: 1. out of pocket expenses 22,019 2. past economic loss 107,856 3. interest on past economic loss, less workers 7,600 compensation payments 4. Fox v Wood component 7,388 5. future economic loss 213,394 6. general damages 75,000 7. interest on past general damages 29,680 463,037 Pursuant to s63 of the Workers Compensation Act an amount of $118,835 had to be deducted from the assessed figure of damages. Accordingly judgment was entered for $344,202. The first issue left for decision by this court concerned item 2, past economic loss. In calculating this figure Enderby J divided the period from injury to trial in 1988, into three periods: 23 August 1977 to 31 August 1978, 1 September 1978 to 5 October 1979 and 5 October 1979 to trial. The second of these three periods was not the subject of any argument. The parties were agreed that as the result of a determination in the Workers Compensation Commission of partial incapacity for the period, the appropriate figure was $1,710. 2 UNREPORTED JUDGMENTS In regard to the first and third periods, Enderby J found that the plaintiff was totally incapacitated and that his earnings would have been the equivalent of his basic award entitlement at the time of his injury plus about 30% representing his average overtime. He assumed the plaintiff would have worked throughout the two periods and deducted an amount for tax from the total at a rate agreed upon by the parties. In the appeal two points were relied on by Firestone for saying that the result arrived at was mistakenly large. The first was that documentary evidence favourable to Firestone had been wrongly rejected, and the second that his Honour's conclusion concerning the probable average weekly earnings of the plaintiff could not be supported. The first point was that some photostat sheets of what looked like wage records relating to the plaintiff were wrongly rejected. They were tendered under Pt IIC of the Evidence Act. No evidence was given concerning them; the judge was asked on the basis of s14CL to draw conclusions from looking at the documents themselves and then to admit them. It was contended in this court that the documents having been put before him he was bound as a matter of law once he had looked at them, to admit them. It is not necessary in my opinion for this question of law to be answered in this appeal. After considering the information which the rejected documents are arguably capable of conveying, some of which is obscure to say the least, it does not seem to me that on any reasonable interpretation of that information, their contents would have assisted Firestone's case. In some respects the documents even took the plaintiff's case further than was contended for at the trial. Counsel for Firestone said the documents would have helped Firestone at least on the question of the plaintiffs credibility. It was said that figures given by the plaintiff were so at odds with some contained in the documents that Firestone had been wrongly deprived of material that could have been of real potential assistance to the conduct of its case; even if, in the result it had not helped, Firestone should not have been deprived of the opportunity to use it. I do not think that submission is accurate in the circumstances of the case. When this court was considering the rejected documents, a number of questions were directed to counsel about their meaning which counsel was not immediately able to answer. The court then invited later clarification or tabulation of what it was contended the documents showed, but this never came. Such understanding as the court was able to achieve of the documents (and it must be remembered if they had been admitted they stood entirely on their contents, without other explanatory evidence) not only indicated as already mentioned that they may have helped the plaintiff's case, but also did not reveal any material which could have been of any use in cross examination, if indeed cross-examination of the plaintiff on a document not prepared by himself (or so far as the evidence went ever seen by him) would have been permissible. I thus conclude that if the evidence had been admitted it could not have been any help to Firestone in obtaining more favourable findings of fact than those arrived at by the court, or in any other way. The rejection of the evidence in my view had no effect upon the proper disposition of the case and need not be considered further for the purposes of the appeal. The other ground was that the trial judge put too favourable a complexion on the evidence of the plaintiff in regard to his memory of what he had been earning in August 1977. However it seems to me that the trial judge did not rely on the URJ FIRESTONE AUSTRALIA PTY LTD v IGIC (Priestley JA) 3 plaintiff's evidence in this respect. He accepted that the plaintiff was telling the truth as he believed it to be, but then said the question was - was he mistaken? He then assessed what materials there were independent of the plaintiff's evidence. In my opinion, the method followed in arriving at an estimate of the plaintiff's earnings at the time of the accident was appropriate. There was material before him upon which it was reasonable to take the figures that he did, and the result, with respect, seems to me to have been a reasonable outcome from the materials. The figure for past economic loss of $107,956 should therefore stand. However, it was agreed between counsel that there was an error of calculation in the amount of interest awarded on that past economic loss, less workers compensation payments. The parties are agreed that but for that mechanical error that figure would have been greater by $6,186. In regard to the future economic loss, counsel for the plaintiff agreed with the basic point of Firestone's appeal, that the trial judge had been wrong in making his calculation on the footing that the plaintiff would have worked to the age of seventy-one. For the plaintiff it was conceded that in light of the evidence as it was left at the trial, such a finding could not be supported. The question then became what the appropriate allowance should be on the materials before the court, bearing in mind his Honour's favourable findings about the plaintiff's credibility and desire to work, which, rightly, were not challenged. For Firestone, in addition to the basic point just mentioned, the same two points as were argued in regard to past economic loss were again relied on, and for the reasons already given they do not in my opinion furnish any reason for finding error in the method adopted by his Honour. Following agreement between the parties on the basic point, there was still a dispute between them on the appropriate calculation in regard to future economic loss. Enderby J had worked on the footing that the plaintiff, uninjured, would have maintained his full earning capacity, award rate plus 30% for overtime, less tax, until the end of his working life. He had reduced the overall figure by 15%, in the conventional way, for vicissitudes. For Firestone it was said that it was quite unrealistic to find that the plaintiff, who was unfitted for any other work than the extremely strenuous kind of physical work he was doing for Firestone, would have been able to maintain the capacity he had at thirty-five for all of the following thirty years. Although counsel for the plaintiff did not concede that this was so, he put submissions to the court about the appropriate way in which the future earning rate should have been projected if the court were inclined to agree with Firestone's submission. The parties were agreed that Enderby J's calculations had been based on a weekly net figure of $272.75. Firestone contended that the most appropriate way of estimating what the plaintiff's future earnings would have been but for his injury was to reduce that weekly figure to $240 and apply that to the period until age sixty-five. Although this would mean using the one weekly figure for a period during which Firestone was arguing the figure would be declining, it was submitted that the proposed figure would be an adequate average for the period. Adoption of Firestone's method would reduce the figure for future economic loss by $60,343, this being made up by a figure of $39,226 (agreed by both parties as being an amount which had to be deducted in any event because it represented the figure for the period from age sixty-five to seventy-one) and $21,117 being the result of reducing the $272.75 figure to $240 per week for the nineteen years to age sixty-five. 4 UNREPORTED JUDGMENTS For the plaintiff it was submitted that nothing more should be deducted than the $39,226 figure, but if the court thought Firestone's submission should be accepted in regard to the lesser amount the plaintiff probably would have been earning as he neared sixty-five, then the method to be adopted was to assume he would work at the full $272.75 rate until age fifty-five and at a rate of $242.75 per week thereafter until sixty-five. This would produce a reduction of $7,823, which together with the agreed $39,226 would amount to a deduction of $47,050. Although I recognise that making estimates of this kind is a very imprecise exercise, it does seem to me unrealistic to forecast that the plaintiff would have worked at his maximum earning power right to the end of his working life and I think some reduction in his capacity to earn must be allowed for. Again recognising the somewhat arbitrary nature of the evaluation process involved, it nevertheless seems to me that the better estimate to make is one closer to the plaintiff's alternative submission, that is the submission made in the event that the plaintiff's preferred position that the plaintiff should be assumed to have worked to full capacity until retirement, was not acceptable. On further considering the matter since the argument in the case, it seems to me that even that method is slightly too favourable to him and I would enlarge the resultant figure slightly to $10,000. Thus, in my opinion, from the amount allowed by Enderby J for future economic loss a total of $49,226 should be deducted. Ihave reached this point without mentioning that there was a further argument for Firestone going to the rate of interest allowed by his Honour on past net economic loss less workers compensation payments and upon the part of general damages which his Honour treated as having accrued at the date of judgment. His Honour used a 7% figure which counsel for Firestone agreed corresponded with current practice as it had developed following the High Court's decision in Cullen v Trappell (1980) 146 CLR 1 at 21-22. In Bryce v Tapalis (Kirby P, Mahoney and McHugh JJA, unreported, 10 February 1989) this court considered that judges assessing damages in cases such as the present were bound by the High Court's decision in Cullen to apply commercial rates of interest in the way Enderby J did. Counsel for Firestone at first indicated that he wished to seek leave to re-argue Bryce; he mentioned, I think, that this case might be a suitable one for seeking special leave from the High Court to reconsider the correctness of Cullen. The court indicated that it was not disposed to allow Bryce to be re-argued and although leave was not then formally refused, the case proceeded thereafter on the footing that it was likely to be. In my opinion leave should be refused. Doubts were expressed in Bryce about the appropriateness of aspects of Cullen (by Kirby P in dissent, and by McHugh JA, on different grounds) but the result of the decision was to affirm, as earlier cases in this court have done, that this court regarded itself as bound to follow what had been said by Gibbs J in the matter. I do not think it is appropriate for this court to reconsider now what has become the settled practice. If there is to be an alteration, the stage has been reached where it can come only from a further decision of the High Court, or by legislation. Counsel for Firestone then sought to distinguish Bryce and Cullen on various bases. The problem with each of these is that, so far as I can see, none of them was argued before Enderby J. Evidence and submissions before him finished on 19 May 1988, when he reserved his decision. Shortly afterwards he communicated with the parties in an effort to overcome what he thought were URJ FIRESTONE AUSTRALIA PTY LTD v IGIC (Priestley JA) 5 deficiencies of evidence bearing on some aspects of damages. Following this communication, alternative calculations were submitted to him. He later gave notice that he would deliver judgment on 25 October 1988. On that day before Enderby J delivered judgment, counsel for Firestone made an application to reopen the defendant's case in order to adduce evidence concerning the effects of inflation. No transcript is available of what was then said but this court was told (by agreement between senior counsel for the parties) that junior counsel remembered that when the application was made Enderby J replied "What is the point? I am bound by the High Court" or words to that effect. This would indicate that his Honour understood that he was then being asked to reopen so that evidence could be led relevant to a questioning of the observations of Gibbs J in Cullen, and declined to grant the application. In view of the history of the matter until that time, I do not think his refusal of the application involved any error in the exercise of discretion. For present purposes the result of what happened at the trial seems to me to be this. Belatedly though he did it, counsel for Firestone probably sufficiently raised the Cullen point to justify the statement that the point had been taken even if only on a formal basis and could be taken again in the Court of Appeal on the same basis, preserving Firestone's right to seek special leave to try and have the point reconsidered in the High Court. As to the arguments Firestone now wishes to rely on to distinguish Cullen and Bryce, the position is different. For one thing, in the absence of any indication that there was ever any reference to them at the hearing before Enderby J, I think the court would be reluclant to allow the arguments now to be raised. Further however, each of the bases upon which Firestone's counsel now seeks to distinguish the two authorities seems to me one which, if raised at the trial, could have been the subject of evidence had the plaintiff desired to dispute the factual basis of some of the argumentative assertions of mixed fact and economics which are involved. It also seems to me very likely that if any of the bases of distinction were to succeed, it would be necessary for a new trial to be held so that the court would have sufficient material to enable its decision to be applied to the facts of the appellant's case. The time to have led, or attempted to lead this evidence was at the first trial. That not having been done, I do not think this court should now embark upon arguments not raised at first instance. I therefore go no further in describing or discussing the arguments that Firestone sought to raise. The result of the submissions for Firestone is therefore that they succeed to the extent that the amount allowed by the trial judge for future economic loss should be reduced by $49,226. However, in the course of the hearing, some other minor matters emerged showing that some of the trial judge's calculations involved slight errors resulting in amounts slightly smaller than should have been assessed, being awarded to the plaintiff. It is unnecessary to go into detail about these, because the parties, in the sensible spirit that pervaded this appeal, agreed on them. The agreement was that the plaintiff should have additional interest on past economic loss in the amount of $6,186, additional interest on general damages in the amount of $1,596, further loss of wages from date of hearing to date of judgment in an amount of $853 and a further Fox v Wood component on the last figure of $427. This meant that the plaintiff should be credited with $9,062. Deduction of this from the amount which Firestone had shown should be taken 6 UNREPORTED JUDGMENTS from the figure for future economic loss brings out a figure of $40,164 to be deducted from the amount assessed by the trial judge. It has not been necessary in this case to embark upon a full reassessment of the damages suffered by the plaintiff. That is partly because the approach of the parties was to concentrate on those elements of the damages award that I have mentioned, and to assume that if any of those should require adjustment, that adjustment would be all that would be necessary without the need to look at the other components in the overall figure. I say that attitude of the parties is partly the reason for the approach taken, because it is a matter really for the court to decide and not the parties. However, what the parties have done in this case seems to me to be practical; in a general way I agree with the way Enderby J dealt with the case and I have seen no reason to question any of the ingredients of his assessment of damages other than those specifically raised by the parties. Since I can see nothing in the case to indicate that if the court were to embark upon a full reassessment it would arrive at any result significantly different from that arrived at on the more limited basis, I think that no more elaborate consideration of the matter is required. The result is that the judgment of $344,202 should be set aside and in its place judgment should be entered as at 25 October 1988 in the amount of $304,038. The defendant should pay the plaintiff's first instance costs. The plaintiff should bear the defendant's costs of the appeal and have a Suitors Fund Certificate. The costs order in this court however is subject to this: I understand that an earlier date for hearing, 1 May 1990, was vacated upon the application of Firestone and it is agreed that Firestone should bear any plaintiffs costs thrown away because of this. I suggest that in case there is any misunderstanding by the court of the costs position the orders should be as follows: ORDERS 1. Appeal allowed. 2. Judgment below set aside. 3. In lieu of judgment below, judgment to be entered in sum of $304,038 as at the date of the judgment set aside; defendant to pay plaintiff's costs at first instance. 4. Plaintiff/respondent to pay costs of defendant/appellant of appeal, subject to the defendant/appellant paying any plaintiff/respondent's costs thrown away because of the vacation of the hearing date of 1 May 1990; liberty to apply within seven days of today's date is given for the purpose only of seeking variation of this costs order if there is any dispute about the position concerning the vacation of the 1 May 1990 hearing date. 5. Plaintiff/respondent to have a Suitors Fund certificate. Clarke JA I agree with Priestley JA. Meagher JA I agree with Priestley JA. 1. Appeal allowed. 2. Judgment below set aside. 3. In lieu of judgment below, judgment to be entered in sum of $304,038 as at the date of the judgment set aside; defendant to pay plaintiff's costs at first instance. 4. Plaintiff/respondent to pay costs of defendant/appellant of appeal, subject to the defendant/ appellant paying any plaintiff/respondent's costs thrown away because of the vacation of the hearing date of 1 May 1990; liberty to apply within seven days of today's date is given for the purpose only of seeking variation of this costs order if there is any dispute about the position concerning the vacation of the 1 May 1990 hearing date. URJ FIRESTONE AUSTRALIA PTY LTD v IGIC (Meagher JA) 5. Plaintiff/respondent to have a Suitors Fund certificate. Counsel for the Appellant - B Gross QC / I Roberts Coumsel for the Respondent - D Wheelahan QC / A Katzmann Solicitors for the Appellant: Mallesons Stephens Jacques Solicitors for the Respondent: Andrews